Black entrepreneurs in Detroit will soon have access to $1.8 million worth of funding opportunities to grow their small businesses.
The Gilbert Family Foundation is committing $600,000 over three years to the Metro Detroit Black Business Alliance (MDBBA), a group dedicated to supporting and uplifting Black business owners. At the same time, JP Morgan Chase is directing $200,000 toward programming at the alliance and the group is launching a $1 million fund of its own to help Black entrepreneurs within the footprint of District Detroit.
Darnell Adams, director of Detroit community initiatives for the Gilbert nonprofit, said the funding being committed by the organization will help address the racial wealth gap that exists for Detroit’s business community.
The funding commitments were announced as part of the alliance’s The State of Black Business Luncheon at Empire Kitchen and Cocktails in Midtown. The Monday event brought about 20 guests together from Detroit’s for-profit and nonprofit sectors to discuss the successes and challenges of Black businesses in the city. The luncheon also celebrated the two-year anniversary of the alliance.
“MDBBA serves as a powerful catalyst for change providing invaluable technical assistance, policy advocacy and exposure to resources for both future and existing entrepreneurs by helping them access traditional capital to compete for large contracts with corporations and municipalities,” Adams said. “This scene is creating a new entry point for Black entrepreneurs to participate in Detroit’s historic narrative as the innovation capital of the United States.”
In addition to the foundation’s announcement, JPMorgan Chase’s grant to MDBBA will support its Capital Connect program, said Pierre Batton, Detroit’s Corporate Responsibility Lead for the bank. The 12-week program teaches Black entrepreneurs how to create a business plan, financial projections and pitching. The entrepreneurs are then connected with MDBBA’s funding partners.
“All too often, access to capital, mentorship and other critical resources needed to grow and scale are not equitably available, especially to Black business owners,” Batton said. “And so, MDBBA is bringing a culturally relevant framework to our small business ecosystem across the region and we’re proud to support them in their ongoing efforts to open more opportunities to business owners here in metro Detroit.”
MDBBA COO Kai Bowman told BridgeDetroit news of the two grants were exciting, especially since the organization struggled to receive funding when it formed in 2021.
“How many times does somebody offer me $800,000 in one day?,” he asked with a laugh. “These are multi-year commitments, which is even more important for us that this work will continue to grow. I’m super grateful for Gilbert and Chase for their generous gifts.”
For its part, MDBBA is launching a $1 million fund for Black entrepreneurs in District Detroit. Plans on how the money will be administered are still being finalized, Bowman said, but the fund is designed to help business owners pay for rent and other expenses.
Olympia Development of Michigan and Stephen Ross’ Related Companies are partnering on a $1.5 billion project for hotels, apartments and office buildings in “District Detroit,” an area on the north end of downtown largely defined by sporting arenas, event venues and empty parking lots.
District Detroit will include four mixed-income residential buildings, four commercial office buildings, two hotels and outdoor community spaces. Overall, the project includes 1.25 million square feet of commercial office space, 146,000 square feet of retail space, 467 hotel rooms and 695 residential units.
“A lot of businesses aren’t aware that when they go into a commercial space, that they don’t own it,” Bowman said.
Small businesses need more support, funding panelists say
The luncheon also featured a panel discussion on the state of Black businesses featuring Bowman, Anika Goss, CEO of Detroit Future City, and Wafa Dinaro, executive director of the New Economy Initiative. Charity Dean, president and CEO of the alliance, moderated the discussion.
Goss said the most startling thing she’s seen in the business industry is the stark difference in loan rates between Detroit and the metro area. The average loan rate for Detroit businesses is about $2,900, while metro Detroit businesses have an average of $4,200, Goss said.
“If our low rate is already $1,500 behind the rest of metro Detroit and the state, then you’re already starting from a period where you’re not going to be able to catch up,” she said. “And so, we have to be able to figure out a way of how to even that playing field for small businesses.”
Meanwhile, Bowman talked about having to turn people away for the Capital Connect program. He said 100 people have participated in its five cohorts, but MDBBA has had to turn away 75% of applicants because as a small organization, they’re not able to help everyone.
“We try our best to keep them engaged, but the reality is that a lot of folks pivot and do something else,” Bowman said. “Some just say, ‘Hey, look, I’ll figure it out on my own.’ So, 75% is a number I think about daily.”
Dinero said a percentage she thinks about is 50%, which is the number of people employed by small businesses in Detroit. She said Michigan provides limited support to small businesses and needs to do more to keep entrepreneurs here so that they don’t move out of state.
“As a state, we see all of these big incentives that are going to large businesses,” Dinero said. “They’re bringing in 50 jobs or bringing 100 jobs or bringing 400 jobs, but we’re really stuck in manufacturing. We have businesses here with ideas. We should be making sure that they stay here, that they grow here and that they have the resources to thrive in our backyard.”
Bowman also talked about retaining local talent in Detroit as well as how business owners still have to jump through hurdles when they want to open a business at home after they’ve become successful in another city. He said there should be an office of small business affairs that focuses on these types of businesses every day.
“Who in the city wakes up every day thinking about small businesses, how do we attract them, how do we retain them, how do we engage them?” he said. “And right now, that’s a void.”
Dinero said entrepreneurs need practical assistance so that they’re able to run their business.
“We could provide all of the funding for capital, but we need to make sure they are ready,” she said. “Somebody who can bake cupcakes is really good at baking cupcakes and can make an incredible cream cheese frosting, but they might not know how to do their books.”